Sun Pharma suffers jolt

OUR SPECIAL CORRESPONDENT

Mumbai, March 13: Sun Pharmaceutical Industries is the latest Indian pharmaceutical company to face flak from the US Food and Drug Administration (USFDA).

The US drug regulator has slapped an import alert against Sun Pharma’s cephalosporin facility at Karkhadi in Gujarat. The import alert means that India’s largest pharmaceutical company by value will not be able to export products made from the unit to the US.

Earlier, pharmaceutical giants such as Ranbaxy Laboratories and Wockhardt had faced penal action from the USFDA.

This is the first import alert that the US FDA has issued against Sun Pharma’s plants. The Karkhadi facility also manufactures active pharmaceutical ingredients (APIs). Sun Pharma has around 18 formulation and eight API plants. Of these, 15 are USFDA approved units.

According to the USFDA, an import alert enables detention without physical examination of drugs for firms that have not conformed to good manufacturing practices.

Confirming the development, Sun Pharma said in a statement to the stock exchanges that the import alert was issued by the USFDA as a follow up to the last inspection of the facility during which some instance of non-compliance of current good manufacturing practice regulations were identified.

“The company remains fully committed to compliance and has already initiated several corrective steps to address the observations made by the USFDA,” Sun Pharma added.

The company, however, pointed out that the FDA action would not have a major impact on its financial performance since the contribution of this facility to its consolidated revenues was negligible. Analysts estimate that the unit contributes between 1 per cent and 2 per cent to its total revenues.

Sun Pharma went on to add that there would be no change in the consolidated sales growth guidance given for this fiscal. The company has projected that revenues will grow 29 per cent in 2013-14.

Earlier this week, Sun Pharma had voluntarily recalled 2,528 bottles of its generic version of diabetes drug Glumetza in the US on the basis of a customer complaint.

While India is a major supplier of generic drugs to the US, the FDA has taken action against several Indian drug makers for non-compliance with good manufacturing practices.

In January, the USFDA barred Ranbaxy from supplying APIs made from its Toansa facility in Punjab. This is the fourth Ranbaxy unit in India that has been restricted by the regulator from supplying products to the US. The other three include its Paonta Sahib, Dewas and Mohali facilities.

Wockhardt has also faced similar action against two plants in the country.

On Thursday, the Sun Pharma stock fell 5 per cent on the stock exchanges. On the BSE, the stock closed at Rs 573.60, down by Rs 30.40 or 5.03 per cent.

Market circles said another reason for the slump in the Sun Pharma stock was a statement made by Hikma Pharmaceuticals, a Jordanian company, that prices of doxycycline (used to treat bacterial infections) could come down because of increased competition. Sun Pharma is one of the players in that segment.